Ther Fed creates a lower and upper bound for the federal funds rate and the incentives that drive financial institutions to move the federal funds market to that target. a. Select the tool(s) the Fed uses to incentivize financial institutions to move the federal funds market to the targeted federal funds rate. The Fed buys and sells government bonds. borrows money overnight from financial institutions. pays banks interest on excess reserves. lends directly to banks through the discount window.

Ther Fed creates a lower and upper bound for the federal funds rate and the incentives that drive financial institutions to move the federal funds market to that target. a. Select the tool(s) the Fed uses to incentivize financial institutions to move the federal funds market to the targeted federal funds rate. The Fed buys and sells government bonds. borrows money overnight from financial institutions. pays banks interest on excess reserves. lends directly to banks through the discount window.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Solve all this question......you will not solve all questions then I will give you down?? upvote.

Ther Fed creates a lower and upper bound for the federal funds rate and the incentives that drive financial institutions to move
the federal funds market to that target.
a. Select the tool(s) the Fed uses to incentivize financial institutions to move the federal funds market to the targeted federal
funds rate.
The Fed
buys and sells government bonds.
borrows money overnight from financial institutions.
pays banks interest on excess reserves.
lends directly to banks through the discount window.

b. Select the tool(s) the Fed uses to create a lower bound for the federal funds rate.
The Fed
pays banks interest on excess reserves.
lends directly to banks through the discount window.
c. Select the tool(s) the Fed uses to create an upper bound for the federal funds rate.
The Fed
borrows money overnight from financial institutions.
borrows money overnight from financial institutions.
pays banks interest on excess reserves.
lends directly to banks through the discount window.

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